The US Trade and Development Agency (USTDA), a Kenyan renewable energy developer and a US battery storage manufacturer have teamed up to develop a solar PV plant with integrated lithium-ion battery storage. The venture is an important milestone in the disruption of the African power market by energy storage technologies.

USTDA has partnered with Kenyan renewable energy developer Xago Africa and US battery storage manufacturer Alevo USA, Inc to develop Kenya’s first utility-scale (40MW) solar PV plant with integrated lithium-ion battery storage. At the same time, South Africa’s utility Eskom has just opened an energy storage test and demonstration facility in Johannesburg. The facility is researching and comparing the different energy storage technologies available on the market as a precursor to integration into the national electricity network. Eskom estimates that it requires 2GW of energy storage capacity within the existing grid to accommodate the 18GW of renewable energy intended to be procured under South Africa’s Integrated Resource Plan.

Energy storage technologies are viewed as a potential game-changer for widespread adoption of renewable energy generation throughout Africa. They facilitate the management of renewable power intermittency, demand response services and the dispatchability of stable, clean and sustainable power into the local or national grid system.

African power generation has traditionally been centralised from costly (often antiquated), poorly managed and maintained, inefficient fossil fuel based plants on unreliable grid infrastructure. Renewable energy and storage technologies offer low cost utility scale and distributed generation opportunities to African countries to break their dependence on such expensive plants. Policy-makers and state utilities in many countries face a challenging journey of market reform and infrastructure improvement in order to make this shift. This is needed before they will be able (and willing) to support widespread cheap and efficient generation capacity from distributed renewable energy with storage plants running alongside larger centralised plants, each selling power at cost-reflective tariffs and across robust and reliable grid infrastructure.

But while adoption of battery storage on a utility scale across Africa may be some years away, technological advances and cost reductions in the sector have already combined to allow local communities and businesses to invest. With the support of export credit agencies and development banks, investment is increasing in smaller energy storage installations as part of micro-grid or off-grid distributed projects. This is facilitating a leap-frog over the slow progress made at a national level. Small, renewable, off-grid solutions with battery storage are a sustainable alternative to the traditional centralised generation model. They are also comparatively easier to finance given lower capital costs, shorter construction periods and fewer risks and complications involved.

For example, the USTDA recently awarded a grant through Power Africa for the development of 25 solar microgrids across Nigeria. The grant to a local firm will be used to complete a feasibility study to evaluate the installation of solar PV modules, battery storage, micro-grid infrastructure and smart control systems and meters across local communities in Nigeria. These microgrids are expected to be operated on a pay-as-you-go basis by end-consumers using mobile payments. This is another new tech-driven business model that is expected to accelerate Africa’s rural electrification process as it is deployed with similar off-grid solar or wind plus storage plants further afield.

Energy storage costs across technologies are falling at an exponential rate and, at the same time, performance and reliability levels continue to improve. Most batteries are now sold with assignable, long term manufacturer’s warranties which provide additional comfort to developers and funders.

The reality is that energy storage is going to unlock huge opportunities for more renewable energy investment in Africa at both a utility and distributed scale that will totally disrupt the traditional African power sector model. Governments and state utilities will need to adapt quickly to embrace the evolution and to avoid more and more potential customers going off-grid in the interim.

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Africa is as dynamic a market as it is diverse. We understand that changes impacting your business can arise rapidly and vary significantly across the continent.

Our understanding of Africa’s markets stems from extensive experience on the ground. Through our Inside Africa blog, we aim to apply this insight to provide you with timely commentary on the latest developments across Africa, as well as insight into the many nations that make up this vast continent.